Global city rankings: London shines but appeal ‘hurt’ by cost of housing

London's 'quality of life' score was diminished due to a housing affordability crisis, as workers allocate a larger portion of their income to housing than residents of most other cities globally, according to a recent report from Oxford Economics. The primary driver of this crisis is the lack of housing supply, which the report's authors suggest would require "political willpower and time" to rectify.

The study positioned London as the second-best global city out of 1,000, trailing only New York, yet surpassing cities like Paris, San Jose, and Melbourne. The assessment considered factors such as economics, human capital, quality of life, the natural environment, and political stability.

London ranked first in human capital but eighth in economics. The report highlighted that London's allure stems from its large economy (the fourth largest globally) and consistent growth. Despite fears that Brexit would harm the city's status as a global financial hub, these concerns have not materialized. London is projected to persist as a top-tier global city, potentially challenging New York's reign.

However, London ranked 144th in the quality of life index, trailing cities like Paris, Berlin, Amsterdam, and New York. New Yorkers boast among the highest per capita incomes globally, yet also confront housing cost challenges. London trails other regions in housing affordability, with the average home price soaring by over 23% from approximately £449,000 in mid-2015 to £554,000 in June 2021.

The average house price in London now equates to nearly 15 times the average earnings after accounting for taxes and fees. Londoners shoulder double the housing burden compared to residents of the North West and North East.

This housing affordability issue has emerged as a critical electoral concern for the Labour government at both national and local levels. Housing Secretary Angela Rayner acknowledged a "slim chance" of Labour meeting its target to construct 1.5 million new homes by 2030, labeling it a "stretch goal." Mayor of London Sadiq Khan also missed his own targets to build affordable homes in the capital.

The Prime Minister announced that London would receive around £6 billion of an initial £10 billion government investment towards council housebuilding nationwide.